Professional Documents
Culture Documents
Corporate governance is the system by which organisations are directed and controlled. It became an important concept for the private sector in the early 1990s, in the light of continuing concern about standards of financial reporting and accountability. In 1992 the Committee on the Financial Aspects of Corporate Governance, chaired by Adrian Cadbury, reported its findings and recommendations for corporate governance in the private sector. The main recommendation was that all companies listed on the London Stock Exchange should adopt a Code of Best Practice and assess their adherence to the Codes principles of openness, integrity and accountability. The Cadbury Report argued that adopting the Code would ensure that companies operated within a framework of effective accountability, achieving the necessary high standards of corporate behaviour and that companies with high standards of corporate governance are more likely to gain confidence of stakeholders.
Corporate governance in public services took Cadbury as a starting point and focussed on the control and accountability aspects of governance. The Committee on Standards in Public Life (the Nolan Committee) considered the allegations of a lack of accountability and found that the vast majority of councillors and officers do observe high standards of conduct. However, there was no comprehensive framework of principles and standards for local authorities to adhere to. In 2001, CIPFA (The Chartered Institute of Public Finance and Accountancy) and SOLACE (The Society of Local Authority Chief Executives and Senior Managers), in association with the LGA (Local Government Association) and the Audit Commission, published a Guidance Note and Framework of Corporate Governance in Local Government: A Keystone for Community Governance and defined corporate governance, as applicable to local authorities to be the system by which local authorities direct and control their functions and relate to their communities. Southend Borough Council contributed to this work. All local authorities were recommended to draw up a Local Code of Corporate Governance based on the CIPFA/SOLACE Guidance. 1. Community Focus
In carrying out its general and specific duties and accepting its responsibilities and ability to exert wider influence, the Council commits to: Work for and with local communities Exercise leadership in the local communities, where appropriate Undertake an ambassadorial role to promote the well-being of the Borough, where appropriate, through maintaining effective arrangements: For explicit accountability to stakeholders for the Councils performance and its effectiveness in the delivery of services and the sustainable use of resources Demonstrate integrity in the Councils dealings in building effective relationships with other public agencies and the private/voluntary sectors Demonstrate openness in all dealings Demonstrate inclusivity by communicating and engaging with all sections of the community to encourage active participation Develop and articulate a clear and up-to-date vision and Corporate Strategy in response to community needs.
5. Standards of Conduct
The openness, integrity and accountability of individuals within the Council form the cornerstone of effective corporate governance. The reputation of the Council depends on the standards of
behaviour of everyone in it, whether Members, employees or agents contracted to it. Therefore Members and senior officers will: Exercise leadership by conducting themselves as role models for others within the authority to follow. Define the standards of personal behaviour that are expected from Members and staff and all those involved in service delivery, and put in place arrangements to ensure: Accountability, through establishing systems for investigating breaches and disciplinary problems and taking actions where appropriate, including arrangements for redress Effectiveness in practice through monitoring their compliance That objectivity and impartially are maintained in all relationships to demonstrate integrity That such standards are documented and clearly understood to display openness and inclusivity and are reviewed on a regular basis to ensure that they are kept up to date